ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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money market account
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mutual fund
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certificate of deposit
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traditional savings account
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Detailed explanation-1: -Risk: Savings accounts have almost no risk involved and offer interest rates that are also on the lower side. You may invest small to lump sum amounts at any time of the year and your returns are calculated accordingly. Investments in mutual funds, however, are subject to market risks.
Detailed explanation-2: -What types of mutual funds are there? Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds. Each type has different features, risks, and rewards.
Detailed explanation-3: -A mutual fund is an investment vehicle that pools money from many investors and “mutually” buys stocks, bonds, and other securities. The investments are professionally managed, making mutual funds a simple way to get broad exposure without having to constantly monitor the performance of many different investments.